Saturday, February 26, 2011

The popular issue in my home country today seems to be: "How do we get the New Zealand economy to really grow?"

Well, what New Zealand needs to do is focus on capitalising on its natural advantages. New Zealand has the ability to develop and sell lifestyle property developments to a global market that are second to none. The far-reaching value of this could be revolutionary to the nations development.

Here is how it can be done, and in my view how it should be done. It's an idea that I have preached for some time, but I would like to provide a condensed vision (and a condensed explanation) with a specific model that should give some food for thought.

As follows:

New Zealand's (potential) resort-type lifestyle property developments are worth as much as they are accessible. In short, this means New Zealand could dramatically increase the value of its developable land if it can also increase the performance and efficiency of its/a transport system, and of course its telecommunications systems.

No comment needs to be made for modern telecommunications, but the ULTraPRT system (or similar) provides new opportunities especially applicable to future property development in New Zealand.

The ULTraPRT system:

In short, ULTra is a PRT (personal rapid transit) system that I have long believed has vast potential for New Zealand property development.

ULTra is fully automated (no drivers) and operates with off-line stations so there is no start-stop operation along the route, making it particularly efficient for many applications. Riders only travel with people that they want to travel with - like a car. ULTra has finally been developed, and its first installation is Heathrow airport - ready for in-service operation.

Note: There would be some superficial changes in an ULTra system designed for residential and long-distance applications.

An "ULTra vision" for New Zealand:

The vision I have in mind [and to stress this is only a best-guess idea, for the sake of providing an example] is an ULTra-loop that runs from Auckland up around the northern coastline, and back again. The following image is self-explanatory. (Red = the proposed ULTra line. It crudely indicates where the mainline might go - supporting coastal property developments).

The northern part of New Zealand, in particular, has a beautiful climate, topography, and a vast interesting coastline. And virtually no nasties like chronic weather extremes, snakes, crocodiles, flying cockroaches etc. The soils are fertile and it's richly green. It is also close(ish) to Auckland - a modern city with a population of about 1.4 million.

Model ULTra installation for New Zealand:

For a long-distance installation you will need to make the roads double-laned each way, for the sake of total-system reliability. You need to be able to get a faulty vehicle off the mainline quickly.

The cars should be electrically powered with battery back-up so the vehicles can self-power when required. Most of the cars should be small 2-seaters, with some being larger multi-purpose vehicles. Other vehicles will be for freight.

An ULTra road will be much cheaper to construct than a traditional road because it is narrow, and supports a fraction of the load of a more typical road designed to accommodate trucks.

I would imagine a constant operating speed of about 80km/h which is energy-efficient, economical and very safe. High-speed bypass lines could always be built in the future if desired.

With corner-banking built into the ULTra road there would be almost no side-forces, making the system particularly comfortable for a New Zealand [hill-ridden] context. You don't need to drive and you can work or sleep on it.

The economic effect:

Obviously something like this would be developed over decades if it were to ever go ahead. But you hardly need to build a 1,000km ULTra line all at once to actualise, potentially, a substantial economic reaction.

What we can offer to the world is exceptionally cheap living (especially cheap housing) and in a resort-like environment which should be very attractive to a vast portion of the global market. And that spells: human resource magnet. Not only would you create demand supporting a boom in property development (goodbye recession) but you also lay a foundation that would be attractive to start-up companies that are not interested in paying out big wages to compensate for their staffs exaggerated living costs.

Note: Refer to Phil McDermotts piece relating to this. We need to realise that personal costs and company costs are ultimately linked - what you give/take from one hand must ultimately come out of the other. Artificially driving up living costs is no way to promote positive economic development.

What kind of growth?

Some industries will be dependant on very close access to a large city, such as Auckland. But many others will not, and many parts of others will not. The latent demand for just about any kind of industry located on my proposed ULTra line is as good as bottomless. New Zealand is tiny relative to our 6.5 billion-population world.

One good example is health: Gerald Celente, the famous trends forecaster, has recently said that anything to do with health will be a major growth industry in the future. How can you fault that? The industrialised world is getting older and sicker. Medical industries/services based along the ULTra line could provide an international service to a demand that we could never saturate. Remember cheap (yet high quality) living systems means that we can import good doctors and technicians etc, for less pay. And also ULTra-based hospitals (and other) can be built for much less than traditional hospitals. (I won't go into detail on this here, but with the ULTra system you can build out - not up).

And what would that be worth to the New Zealand locals, in direct terms? Well, I have a workmate who has been in real pain for months with a hernia that our public health system cannot yet afford to fix!

The list of opportunities goes on virtually forever. Here is the picture: What you are doing with my idea is creating a fertile "agar plate" for growth. If you give the global market a good reason to base their operations in New Zealand, then they will do so. What I believe I am proposing is the cheapest way for New Zealand to effectively do this. It's that simple.

I am talking about using new technology to capitalise on our natural advantages. This is how New Zealand can prosper in a globalised economy.

Environment:

I will keep it short. The ULTra system may use as little as 10% of the energy of standard cars, for a given distance traveled. ULTra paves over a negligible amount of land. The housing supported by the ULTra line can be based, say, 100-200 meters away from the beach and built in good taste (beauty before fashion!). "Sprawling" low-density housing tends to promote rich and diverse replantation. ULTra supports efficient access to local farms for minimal food-miles (and top-quality food).

The black status quo:

If you like my vision then you are most certainly not going to like the Auckland Super City's vision. Theirs is a vision of forced urban intensification - the direct opposite of what I have proposed.

It's an institutionally embedded ideological vision that would be thrown out of an honest court of law in less than 15 minutes, because its premises are so weak. Sadly that court does not exist - only a few decades of anti-sprawl propaganda. (The type of propaganda that makes people subconsciously assume that New Zealand is 20% urbanised, rather than 0.7% urbanised. The latter of course being the truth).

Please see my "Smart growth?" article to find out what's killing Auckland and New Zealand today.

Here is another transport system which I have long believed has serious potential - SkyTran.

SkyTran is moving forward rapidly in its development as the following video suggests. It could represent the cheapest (in terms of infrastructure) and certainly most energy-efficient way to integrate the northern coastline with Auckland, as my prior image indicates. It certainly wouldn't do everything (it doesn't need to), but as a general support system it can drastically improve the efficiency and feasibility of mass-coastal development in New Zealand.

Google's driverless cars:I can appreciate that PRT systems like ULTra will be made largely redundant with the development of full-automation technology in cars (these technologies are moving forward so quickly!). Link here. As this is the case, then systems such as ULTra may be applied mainly to special applications for new townships that want to eliminate cars from their immediate area; that is, used for facilitating resort-style property developments.

Update: 17-04-14:Good talk by Sir Paul Callaghan, relating to the relationship between the importance of NZ lifestyle and economic development. Callaghan is also very right on the fact that NZ's isolation does not have to mean much in terms of economic development - we just have to be a little more selective in what we do, and there is of course vast allowance for that. But if we don't create a foundation for business to want to develop in, then we will continue to economically castrate ourselves. Another critical point he made was that the government cannot pick winners. So true. The best that can be done is to simply lay the foundations for business to do as it will and can.

6 comments:

Andrew, I continue to be impressed with your intuition and the research it leads you to do.

You are SO right about NZ having the advantage of low cost land - IF it chooses to allow its non-rural residents, workforce, and industry to take advantage of this. Running a racket where all urban land is ten times the price it should be, is actually destroying economic competitiveness. It is utterly hypocritical for politicians to claim to care about losing industry to offshore, and claim to care about "inequality"; yet they perpetuate this nonsense.

The Urban Economics Dept. at the London School of Economics has been producing some amazing studies recently on how the 1947 "Town and Country Planning Act" has destroyed Britain's economic competitiveness, led to a shortage of homes, overcrowding, unsanitary conditions, and inequality (worse than the effect of INCOME disparities themselves).

NZ deserves an economic "Darwin Award" for going the same way - when we have oodles and oodles of land to burn, and NEED every economic advantage we can get, to overcome the disadvantages of remoteness and low population and nil economies of scale.

As I see it, the key to any nation’s best advantage is to ,as much as is possible, become self sufficient. But a small place like NZ could find that tough due to a finite number of resources in things like oil for energy, minerals for metals, etc. But for large countries like the USA, it would be quite easy which makes it more inexcusable that rather than embrace self sufficiency which would eliminate poverty, unemployment and the like, our leaders have elected free trade to eliminate our jobs and security and make us helpless and vulnerable to world ultimately controlled by “mysterious forces” who hide in the shadows and stay out of the media.

Yep, it really could be a "little utopia". In internationally comparative terms it actually use to be.

Unfortunately, property prices have been artificially driven up (and other), and its ignoranus propaganda-pumped voters don't know what to vote for, so the country is failing to give its politicians the licence to reform which is what this country needs.

At the moment New Zealand is a pitiful example of castrated potential.

But, if you've got relevant skills, or can work online or something, it can still be an excellent option for many people. Especially for those who love "the great outdoors". It goes from sub-tropical to snowy mountains, and it's all just a car-drive away. (god. maybe I should work for a marketing company!)

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The Great New Zealand Housing Disaster: Click on The Real Deal, below.

Why would you buy a home for $500k when you can build a new home for $200k at the city fringe? Answer: Because you can't build a home for $200k at the city fringe. Because the cost of land has been artificially inflated, and to the point of ridiculous. This is the heart of the reason why housing in New Zealand has been able to inflate to such extraordinary degrees. The supply response to increases in demand has been deliberately choked off. At base, this so-called complex issue really is that simple.